An agent-based model of heterogeneous forest landowner decisionmaking

Abstract

The Forest Agent-Based Landowner Economy (FABLE) model simulates a market where private forest landowner agents with heterogeneous preferences cast bids using normative decisionmaking rules. In doing so, the model connects two areas of study important to the forest economics literature: market behavior and behavior of individual forest landowners. The model constructs heterogeneity by separating agents into those who bid based on a valuation of timber and those who bid based on an amenity value. Furthermore, discount rates vary among agents and stand age is drawn from an empirical age class distribution of North Carolina’s southern coastal plain. Model outputs include price, removals, average harvest age, and age class structure. A sensitivity analysis on demand curve and amenity value scenarios shows expected economic relationships as exhibited by model outputs and by implicit supply and inventory elasticities. For the majority of scenarios, these elasticity estimates, which are not predetermined but represent an emergent property of the model, are consistent with empirical estimates. Equilibrium dynamics mimic long-wave inventory cycles found historically, rather than simple steady-state solutions.